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tv   Bloomberg Markets European Close  Bloomberg  March 23, 2018 11:00am-12:00pm EDT

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julie: here are the top stories we are covering from the bloomberg and around the world. president trump threatens to veto the $1.3 trillion spending bill passed by congress, raising the possibility of a government shutdown at midnight. turn,takes a hawkish picking john bolton as his new national security adviser as he ditches moderates in his inner circle. trade tensions escalate as china heads back on u.s. tariffs. we speak with ian bremmer about why he says geopolitical risk is the highest he has seen since the 1990's. 90 minutes into the trading day in the u.s., bloomberg's abigail doolittle is here with what is perhaps a surprisingly positive picture, that we had big selloff yesterday. abigail: this is a bit of a risk on town after yesterday's big
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selloff area three major averages down, but today we have a bit of a rally for major actors after whipping between small gains and losses, haven bonds are selling off. a bit of a relief rally, on the week we are looking for big declines greater than 3.5% for the three major averages. but take a look at what's happening sector wise. look at this, all green. we have all 11 sectors trading higher. what a difference a day makes. yesterday, all sectors were lower, one was higher, utilities. nonetheless, you get the picture here. there is some breath to this rally. take a look at the industrial .8%, being held by a lot of the stoxx and companies that were hit yesterday by trade war potential. today, we have some of the defense stocks trading higher as well. julie mentioned president trump's caucus choice for his national security adviser and we have raytheon among and -- many
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manufacturers trading higher on the day and we are seeing the stocks trading higher in the industrials. it was a glitter one more terminal in the bloomberg, we may have a small rally today but this chart g #btv 32 02 may suggest there is more work to the downside to be done. the s&p 500 in relation to its 200 day moving average, earlier this year well extended above the 20 day moving average, telling us the index had been overbought. that was the case in 2011, there was a bit of a correction down and then another rebound rally similar to what we saw not so long ago in a serious correction. this may be a blueprint to suggest more volatility, perhaps bearish volatility. mark: just looking at the rsi, where it is 76 117 for the stoxx 600. we are just above oversold territory and we are down for the fourth day in five, the european benchmark was 1.6% lower earlier. it's now down .6%.
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still it in declines and a week of declines heading for the second weekly drop in a row. the biggest weekly drop since march the second, we have broken through the february, march closing lows and we are also on track for the lowest close in 13 months. go is the- wn function. have a look at the german yieldar, this is the going back to the start of 2018 and as you can see from the headline, we are heading for the seventh consecutive weekly drop, the longest stretch downward stretch since july 2016. the yield is marginally out today, yesterday, six basis point drop was the biggest since december 1, why you saw that big flight to safety and since the yield down to the lowest level since january 9. to corporate news, deutsche bank raised about 1.4 billion euros from the ipo of
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its dws asset management division, chief executive john prine working to complete the banks turnaround plan. it sold 44.5 million shares in , we are at5 euros 32.78. in a down market, a remarkably strong performance for dws, that's the 22.25% stake versus a maximum 25% shareholding that deutsche bank wanted to sell dws valued at 6.5 billion euros. another big mover was even bigger earlier, shares down by 5% earlier fell as much as 24% in the u.k. company that launched the u.s. lawsuit over generic competition to its suboxone film medicine to treat dependents on illegal or prescription opioids. it plans to appeal the ruling and the delaware court found that the rival did not infringe
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its patents on the products. about 2 million adults have the disorder last year. opioid abuse disorder, according to a government study cited by the company. the day but lows of still the biggest definer, down by 5.7%. massive spending bill congress just passed has now been thrown into doubt come in a tweet today president trump said he is considering a veto of the $1.3 trillion spending bill over concerns he says about the failure to get a deal on immigration and his border wall. joining us now is marty schenker , congress passed this thing a full day before they had to, which is unusual. maybe that wasn't enough drama for the president. this?riously do we take is the president going to veto this and what kind of negotiations unfold on capitol hill? marty: it's hard to imagine any
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substantial changes to the hill, because the deadline is tonight and congress is ready to go home , most of them have already gone home. it's not quite clear what donald trump hopes to accomplish by raising this prospect. but three weeks ago, i might have said this is just an into threat. on the heels of the activity in this white house, he could veto this bill, which is really hard to conceive, but it is possible. julie: then what happens? marty: what happens was it a make my day moment for the democrats. they will leave the government shutdown squarely at the feet of the republicans and their leader, donald trump. the hard to imagine political consequences that would be at all positive for such a move like that. for one thing, military pay stops, they are all kinds of things that happen in a government shutdown and this won't be a short one.
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if he were to veto this bill, the democrats would have no incentive whatsoever to help them out. mark: government shutdown possible, marty. trade, changes within the administration. it's all happening. what is on trump's mind right now? has -- we had he a story last week about the presidency of one, how donald trump essentially wants to eliminate the discordant voices in his the year and just have people around him who agree with him. but ultimately, it's going to be donald trump who has decided he will rule this country the way he wants to rule it. what's next is really after donald trump and it's hard to see how anything predictable can happen here, because he is such an unpredictable character. that's why the markets are doing what they are doing. isie: does the old --mark:
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the elevation of the new national security adviser, mr. bolton -- how does that change things when it comes to iran, when it comes to south korea, when we know he is a foreign-policy hawk? news: last night on fox when bolton spoke, he was a most trying to dial back the kind of hard-core rhetoric he is known for. including a first strike on north korea and actually regime change. you mentioned you want to make sure that he supported the president, but the point is that all the people who gave more traditional, orthodox foreign-policy prescriptions to this president are gone, except for jim mattis. mike pompeo, bolton are all really hard right on foreign-policy issues and that is the kind of thing that donald trump wants to hear, because it
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fits in with his own internal narrative. julie: all this news over the past 24 hours, whether it's bolton coming in, the tariffs and china, it's important not to forget the legal trouble of the president, whether it is from the various women who have now filed suit about him, the upcoming interview with stormy daniels this weekend, his lawyer leaving and announcing he was leaving yesterday. how muchhe standing -- of a distraction is that going to be? clearly, it is a distraction. it's downloading a lot of his twitter activity and he is talking a lot about it. my personal view is donald trump really wants to talk to mueller, was opposed to that notion or want to put severe restrictions on that. donald trump really believes he can convince bob mueller that he
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did not collude and that will be the end of it. that actually is going to happen pretty soon. and that because donald trump wanted to happen. legal experts say it's a dangerous game for him to play, but donald trump, i believe, is convinced of his innocence and he wants to prove it. julie: he does not seem to be deterred by dangerous games. marty schenker, thank you. let's check in on the bloomberg first word news. kelly lines has more. kelly: julie come in southern france, a deadly hostage standoff at a supermarket has ended. authorities say gunmen killed three people and wounded a number of others and tomato the release of the last writing assailant of the paris terror attacks. he was shot to death when police stormed the market. the gunman was described as a petty criminal who have become rationalized. -- radicalized. china says it isn't afraid to
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fight a trade war. aging announced plans for tariffs on $3 billion of american products, among them, pork, recycled aluminum, steel pipes, and wine. the move came hours after trump moved towards imposing tariffs on $60 billion of chinese goods. he also eliminated china's ability to invest in the u.s. tech industry. single-family home sales increased .6% to an annual rate of 618,000. highesty rose to the since 2009, it may be a sign that rising prices are deterring buyers read the median sales price has risen almost 10% in the last year to three other 27,000 -- $327,000. politicians have been charged with rebellion, visit frank gore judge issued the indictment today, it has to do with their declaration of independence from spain last year. he fled spain in october and has been living in belgium. global news, 24 hours a day,
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powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. tensions, ian bremmer weighs in on the looming trade war, that's just ahead. this is bloomberg. ♪
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mark: live from london, i'm mark barton. julie: from new york, i'm julie hyman. this is "bloomberg markets." analysts have been weighing in on president trump tariffs against china and replacing h.r. mcmaster with john bolton. ian bremmer of eurasia tweeting the worst biggest single day for geopolitical risk since i started eurasia group in 1998.
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ian joins us on the phone to explain. what do you think the implications of the tariffs are going to be? we have gotten the announcement of the retaliatory tariffs from ,hina, and at least in size they are definitely not as big as the ones we announced. what do you make of that? youives: -- mr. bremmer: can't look at them in isolation to see the people around trump right now are much more hawkish than their disposition towards china, and there's not a lot of pushback either from the public and leadership or for business executives on china, as opposed to on nafta, on europe, australia, on american allies. at the same time, you also have a new piece of legislation that has been signed into law by trump on taiwan, a taiwan travel bill that allows american officials to go to taiwan, high-level and vice versa, which is a redline for the chinese. the chinese are looking at all of this and looking at tightening american restrictions on the way that china is
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considered on technology and ip and all of that feels like a transition, a tipping point in the most important bilateral relationship in the world. add to that the bolton appointments, add to that the sharks circling around the mueller investigation and the greater volatility we see from trumps own volatile -- on decision-making as part of that, it's a much more dangerous geopolitical environment. we were talking about a few moments ago, bolton thing on fox news last night that he will defer to the president ultimately, but he has been very hawkish when it comes to north korea in the past. this has president trump repairs to enter into talks with north korea. that bolton will indeed be influential on that point, or do you think the president, as he typically does, we'll just take his own counsel. mr. bremmer: deferring to the president is not a positive in the geopolitical environment. trump does not have a lot of
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expertise on geopolitical issues. he has less than pretty much any president in modern history. one thing you can say about rex tillerson and also mcmaster, even though their relationship with the president was pretty dysfunctional, they ran legally savvy -- they were analytically savvy. he got severe view the pushback on things like the iran deal and north korea and other issues around the world. russia as well. i think first of all, it's going to be much more of an ideological enabler in the same way we see peter navarro is an economist saying whatever trumps instincts are are right and i'm here to facilitate them. nothing bolton will be more of that, which trump will be happy with. bolton is both intelligent and also very experienced person in dealing with the u.s. governmental bureaucracy. he will have much more capacity to work meetings in the white house and have more people
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listening to him on a bunch of issues where he is absolutely more of a military interventionist, both in terms of potential -- he argued for regime change in iran and he clearly wants to rip up the iranian deal, all american allies oppose that. he is much more of a force for military preemption and north korea. on these and other geopolitical concerns, the risk factor has absolutely gone up significantly in the last 44 hours. mark: given you said this big statement, probably the worst biggest single day for geopolitical risk since you started eurasia back in 1998, out of what we just discussed, , trade it is iran, korea threats, global trade war with china, what worries you the most? what has the greatest potential to cause the most immediate damage? put itmmer: the reason i
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that way -- 9/11 was a much bigger shock to the united states and the system, but the system was vastly more stable. you had enormous numbers of allies overall behind the americans wanted to go into afghanistan, and even the russians were supportive and china wasn't a particular thread at that point. as is a radically more unstable environment, the transatlantic relationship is that its historic weakest since world war ii, the russians are much more problematic, the chinese are preparing alternative system. that is why i said that. the context really matters. if you want to look at where the real concerns are, whether it's russia and ciber, u.k., the united states, critical of the structure, is it iran versus saudi arabia or israel, is a north korea? i'm not concerned about one versus the other, i figured the way you thought about the eurozone crisis in 2009, 2010, when we knew europe wasn't sustainable. there were a lot of shoes that were prepared to drop, they were bigger risks. was a going to be the great
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crisis is that europe off? was it spain, cyprus, italy, brexit? france almost ended up with macron not making it a second round, but brexit we got unlucky in turkey we got unlucky. it's an authoritarian state. looksrld geopolitically like that right now. not that i would predict we are having a military confrontation with north korea or iran, but if constellation of geopolitical conflict around the world and the potential for miscalculation by trump over the next couple of years, you recognize that we are not one of the lucky on all of them. and that's really the challenge for the markets. mark: next were joining us today. ian bremmer, eurasia group founder and president. still ahead, we have more on trade tension, eu leaders breathing a collective sigh of relief after winning a temporary reprieve from president trump's
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metal tariff. this is bloomberg. ♪
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mark: this is "bloomberg markets," and mark barton from london. oliver: -- julie: from new york, i'm julie hyman. extensiontemporary from the steel tariffs. anna edwards his life. however the eu leaders responded -- how have you leaders responded? >> some of them responded with diplomatic language, welcoming the temporary exemption which only runs through may 1 or asking for more details. others use much more colorful language, saying he doesn't want to negotiate with a gun to his head. emmanuel macron picked up on that theme and talk this afternoon about the potential
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for negotiation. principle, ar of , wetry which is a friend will not talk about anything if we are being threatened. leaders duplicating that sort of concern, saying they don't want to negotiate under pressure with the time deadline. that's the view of the eu's chief trade negotiator. is ifg question from here there was going to be a trade conversation between the u.s. and the eu ahead of that may 1 deadline, how is it not going to follow file of wto rules. free not a substantial trade agreement, how will it not break wto regulations? mark: theresa may went to
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brussels with the ambition of persuading rebel leaders the pressure was behind what we could call the salisbury attack, the nerve agent attack on the former russian spy. how well did she achieve her aim or not? anna: she did seem to make some substantial progress on that front, without the summit was going to be about brexit a week or two ago and it turned out not to be. it still did feature prominently theresa may, the british prime minister and she managed to persuade the eu leaders gathered here to toughen up their language and toughen up the words they used. they has it is highly likely that russia was to blame and given unqualified solidarity to the u.k. they also recall their ambassador to russia, which has been described as an unprecedented move. there is also a lot of talk this afternoon about further action that could come. they warned the russians to expect further action, which could mean expulsion of
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danes,ts, the lithuanians, the checks, all talking about that. possibility ofhe corrugated action. seems like theresa may has pressures, brexit she has managed to persuade her european colleagues to go with her against russia. mark: great job, anna edwards in brussels. julie: up next, it is "real yield," with jonathan ferro. focus on fixed income. mark and i will be back for the european close. yields are little changed as we go into the fixed income discussion. this is bloomberg. ♪
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from new york city, i'm jonathan ferro with 30 minutes dedicated to fixed income. this is "bloomberg real yield." coming up, trade war fears resurface as china announces plans to retaliate against the united states. ,reasury receiving haven assets libor keeps writing higher. we begin with a big issue, for fed chair powell. >> the fed has moved in a
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decidedly more hawkish way. >> this is the fed saying we are going with the idea that fiscal stimulus is going to overview the economy a bit and we are ready to raise rates to deal with it. >> you sort of say that the tilt to the risk is are they getting behind the curve? i think it's way too early for that and that's what you've only got in three hikes for 2018. we will see where that evolves by junes meeting. >> they might just get four. a close call. given the other uncertainties and trade policy, mr. powell decided to take a cautious course. >> you are new to the job and you want to get through decent meeting at a press conference without putting undue expectations in terms of policy shifts coming in the immediate future. jonathan: joining me around the table is oksana aronov, asset management, colin robertson, head of fixed income for northern trust and him into us from london is jim cielinski, global head of fixed income at janus henderson group.
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aboute learn understanding the reaction of fed chair powell? ms. aronov: he played it safe. andas the inaugural meeting it was important to get through with minimal volatility. it was interesting because during the meeting, it was perceived as dovish, but in the session the announcement subsequent leak, it was perceived as more hawkish. i was writing some comments before the meeting even happened and i said i'm writing this as we are sitting a day away from fed and it doesn't matter whether it's going to be three or whether they're going to indicate more than three. jonathan: why not? ms. aronov: as long as the fed continues to shrink its balance sheet and on the higher rate path, as long as markets continue to grapple with additional supply, not only from what the government is doing but also from less regulated banks,
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which are huge holders of treasury, the technicals for the market and everything off of it are not constructive. jonathan: jim cielinski, does the argument she presents resonate with you? mr. cielinski: i think it does. i think we get too fussed about the dots. the key message is they upgraded their growth and inflation forecast. and also the terminal rate forecast. they are giving you a clear message as to where they think they are headed. thisget too caught up in they are going to do two or three additional hikes, but i think that's probably a mistake. these are forecast and we are talking three years in the future. dot, you need to remember, they are not actual forecast. they are with the fed thinks will work out, based on their models and their expectations. and these are models that have been largely wrong for many years.
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in a lot of uncertainty still remains. jonathan: looking at the dots, to what they are worth of this program but we can bring them up on screen. the big wager going into the federal reserve was wages looking for the spread between december 19 and 2020. we saw a record volume come into that trade and the fed delivered exactly what that volume was looking for, which was this drift hiring rates for 2019 and 2020. that's what the fed delivered. at the front end, the succession between whether we go from three or may we go to four. we are drifting towards four. i would say there are a lot of important messages the chairman powell sent in this meeting and i'm going to come right out and say it. i think the fed is only going to move one more time this year. i really throw the dots out the window. jonathan: what underpins this? mr. robertson: lack of inflation even approaching what the fed would like. pc continues to stay low and i
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think powell alluded to the fact that the forecasts are just forecasts. they are no better or worse than anybody else. i did find it intriguing when you look at the dots and you saw one who had a terminal rate of 480, i thought that was pretty impressive. but the bottom line is i think we will see the data to continue to be moderate and disappoint and i think that powell really laid out that they made one moves, what decision at this meeting and i was raise rates by five basis points, and everything else just gets made is a decision that further meetings. jonathan: for most people, there is no downside risk. not many people calling for one more this year. what do you make of that argument? ms. aronov: let me throw some stats out there. it's really interesting. over the past two years, from march of 2016 to march of 2018, we have seen $300 billion fallen
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to core on strategies, more than ever in the history of this as a class are arguably any other asset class. benchmark has the been over 1%. 1.1%. time whenned over a the fed was at this very kind of early stages of removal of its combinations. -- accommodations. we are starting to enter the later stages of removal of that accommodation. what are those returns going to look like? what does thiswe are starting te mean for portfolios and where will investors get that diversification, and they are struggling to provide it as we have seen in the course of this year with every part of the market down year to date. 4,athan: ultimately 1, 2, 3, what the federal reserve doesn't doesn't do doesn't mean anything to your portfolio strategy whatsoever? ms. aronov: we do not build our portfolio strategy based on where we think the dot plots are or how many rate hikes there
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will be. that's kind of the whole point, you need to be not so focused, my base cases, rates are going to end here or here. the idea is to have a diversified portfolio and what that means today is to extract terms from other risk besides interest-rate risks, which is downloading markets. and that's where the alternative approach comes in. someone could bring my screen up, when you look across fixed income sectors year to date, you see everything, including extended sectors have posted negative returns. there has been no place to hide, because everything has been traded completely correlated and very tight from the spread standpoint. what has actually performed this year? floating rate instruments, certain pockets of the market that are floating rate instruments, certain select shorts, convertibles, if you think about where all the thetics in d.c. and
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economic backdrop, where to the benefits of that accumulate? in converts,that the of rate structures given that we are in the rising rate period right now. --athan: the opportunity that's where you think they are ultimately. ms. aronov: certainly, there has been interesting pockets to add as we have seen volatility. this is kind of the issue with traditional fixed income management, we look across portfolios for decades, they've carried cash balances between 2% and 3%, five years ago, 10 years ago, 15 years ago, and you can't take advantage of volatility with that kind of position. one of the things that we've been very focused on is being a liquidity provider during perioodds of volatility. jonathan: what are your thoughts on what she was talking about?
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the risk mitigation characteristics of various a fixed income, a bit of a novelty this week and treasury actually received some safe haven flows. it hasn't been that way over the last couple of months. was that a one-off? thinkelinski: i don't that story is gone, but i think the valuations to make it tough for bonds to offer a lot of hedging ability. the starting point of low yield gives you limited opportunity to get that appreciation whatever things are going down. add to that the concerns right around the balance of payments and deficits and the unwind of quantitative easing, i think there's enough headwind and tailwinds to consider for bonds that are just universally positive. i think the safe haven flow element is still there. the amount you might see bonds rally on safe haven flows i suspect probably a lot less than what we are used to. it's a very important question. how to investors think about a safe haven in an environment
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like this? it really depends on how you think about an environment characterized by fiscal stimulus story inflation, central bank accommodation removal, all those things, pro-business washington, d.c. if you think that is an environment in which traditional fixed income will outperform cash, that's your answer. we don't necessarily think that's going to be the case. jonathan: i want to give you the final world -- final word. one more hike, express that in the market for me? what's the most mispriced thing based on that call? mr. robertson: the most mispriced thing to me would be 10 year treasuries. jonathan: where you want them to be? they can trade lower than where they are right now. would it be the most mispriced asset? jonathan: the fed only goes one more time, are you expecting yields despite higher because
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they have been more, did it growth, or are you expecting yields to come low? mr. robertson: i expect yields to stay here are come lower. where the fed will become challenged is -- the dot plots, throws away because if we look at central tendency and fed funds and we added eight hikes, we are at three and 5/8 by 2020. that doesn't make any sense to meet with a 10 year treasury at 283. there's a disconnect, but more importantly, what i would say is what's going to happen under chairman powell is he is not going to force the yield curve inversion, and i don't think the long end of the curve is going to cooperate as people i do think there were three more hikes this year and three more hikes next year. operation by investors doesn't take place, the fed will then be my view that the data won't support hikes and if investors aren't supporting the hikes and the data is not supporting the hikes, the fed is not going to hike. jonathan: we will end up with a
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flat yield curve. colin robertson, oksana aronov and jim cielinski. coming up, the auction block, opening of a cold with the second largest dollar terminated offering this year. from new york, this is "bloomberg real yield."
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jonathan: i'm jonathan ferro, this is "bloomberg real yield." to the auction block now, where underwriters are getting more aggressively against each other for work. at least when it comes to money bond options. the volume of the sales plan for the next 30 to raise -- 30 days dropped, with yesterday's issuance down 21%. the seconde made
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largest denominator -- dollar denominated offering, raising enough money to refinance more than half the debt it has been cheering in the next two years and finally, we were was the indliner with $1.5 billion sales lead financing, the company was negative earnings broke through headline risk to borrow more than planned it better terms, reflecting how hot the leverage loan market is still running. me is oksana aronov from jpmorgan asset management, colin robertson from northern trust and jim cielinski from janus henderson group. one of the big stories over the past month i would say is this drift higher -- real aggressive rip higher in libor. libor moved up to about 2.3% and we have seen a floating-rate products perform well on the back of that. loans have run a few sectors here today that
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posted positive returns. credit expansion security is another pocket and also floating-rate, probably a bit lesser-known because it's a new market but the idea the basically the transfer risk directly to investor from fannie and freddie's balance sheet, it's not entirely surprising that libor is moving up. there are some murmurs of their about this potentially signaling some sort of risk in the financial sector, not likely. this is sort of a natural occurrence with the rising rate environment in the u.s. and central banks globally following suit. in this kind of environment, it's going to be very difficult for traditional interest rate driven product, even spread product that is trading so tight to perform well. jonathan: the bottom line for most people, the consensus view, is that this is a symptom of credit stress elsewhere.
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the murmurs about something elsewhere in europe, but ultimately it's not a sign of credit stress, but there could be consequences and i'm just wondering what your thoughts are on what the consequences might be. increasenski: it does cost. entries are worried about outflow it does have an impact on policy. i do agree. it's not corroborated by any other signs of stress that i see. worry aboutant to getting too complacent, but i would agree. i think it's more due to technical factors. the question the qubes coming up is at what point does this aggressive shift hiring short-term borrowing costs start to compete with capital elsewhere? for we near yet? -- are we there yet? mr. robertson: i think we are there. jonathan: what will impact the fixed income universe? mr. robertson: in the short end. liborf the increase in ois and the libor rate number one has been mentioned. consistent with rates moving higher. that's no surprise to me.
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i also concur that i do not believe that it is an indicator of any type of stress in the market whatsoever. i think there is an opportunity there. also i think what's important and that we haven't pointed out yet is the repatriation of cash from overseas. i think that has a significant effect on where this level is going. jonathan: where are the opportunities? mr. cielinski: in the fixed income market overall? jonathan: you said there would be opportunities. mr. cielinski: if you think about my forecast, and a lot of areas of fixed income have seen deteriorating performance. obviously, with my view, high yield would be attractive. high-yield bonds would be attractive. that would be both domestically and globally. there would be opportunity in certainly the treasury curve, and even with diversification sense, we are not getting paid zero for cash anymore. is can diversify there
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really low rate environment. jonathan: why take credit risk? you came on a couple of months ago and said i want triple c's? and guess what has outperformed -- triple c's. ms. aronov: we were talking about the fact that generally went from being extremely bullish on high-yield and lower rated credit to being very bearish on that because of the spread compression that we saw and the only pockets that perhaps remain because of security selection has been that lower rated bucket in the triples the bucket. you have to be extremely selective and i want to emphasize that generally we have taken a huge step back from credit exposure does it is so tight. when high-yield goes inside of roughly 450 basis point spread to treasuries, it starts to be highly positively correlated to treasuries and stars to act more like a treasury in terms of insensitivity to interest rate risk. high-yield after this most ,ecent quote unquote blowout
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the lowest on record for emd was 200 in 2007, so we are still hovering close to some of the most tight levels in all of these credit sectors and we think there will be better opportunities to get on. seeshan: used electrical -- do you still like triple c's? ms. aronov: we like floating-rate loans more. shorts in the em space, given how tight spreads are, and cash is not tracked. is 2.3%.ently and holds to your in treasuries and makes not much more there for the duration risk. cash gives you that optionality in portfolio that cannot be substituted, given the deteriorating picture of inventory. there are no shock absorption mechanisms that you used to see
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10 years ago. , withan: oksana aronov colin robertson and jim cielinski from janus henderson group. yields lower, two basis points on a two-year note and a bid coming through on the back of the week for 10 year treasuries and the equity market fell out of bed. two basis points lower on the week at 283 and we and slower by basis point on a 30 year bond yield. ,till ahead, the final spread the week ahead featuring a fresh rating on u.s. inflation. this is "bloomberg real yield." ♪
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jonathan: i'm jonathan ferro, this is "bloomberg real yield." spread. for the final
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they will be a shortened trading schedule due to good friday ahead of the easter holiday. we get a series of u.s. economic data points, including personal spending, housing, and a look at inflation through core pce. aronovith me as oksana from jpmorgan, colin robertson from northern trust and jim cielinski from just henderson group -- janus henderson group. at the show is a re-airs, there will be a lot of noise coming from washington, d.c., whether it's about white house palace intrigue or trade wars. set me up for your framework for thinking about what is happening in the nation's capital in the united rates and how you draw a line between noise and news. if youertson: i do think look forward to next week, it's less about the data and quieter on the central bank front. it's going to be about the news and in particular, trade is the key element to watch. i think what we have is fear of retaliation and we will get some
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from china. mr. cielinski: i think they are and lookingr cards longer-term and i think we may begin to get a sense of whether trump is trying to get china to behave better pertaining to north korea, and those negotiations that are coming up, whether he is willing to pull back a little bit if he gets some positive messages from china. i think that is the thing to watch. i think any heightened expectations now of a trade war -- it's not a war yet, it's just kind of a scuffle. if that works, i think that's probably the key element to watch next week. jonathan: patriots trade skirmish rather than a trade war seems to be the consensus. quick answers for quick questions to get you all lined up. you were leveraged loan the got issued this week -- the uber leveraged loan they got issued this week, do you want to take the credit risk from has lower different kind of product with a leverage loan from uber? ms. aronov: i have to go for the
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fact that we like leveraged loans. jonathan: colin. mr. cielinski: tesla. jonathan: jim. mr. robertson: i would go with the loan. jonathan: libor. getting around. ms. aronov: no. mr. cielinski: no. edmr. robertson: no. jonathan: three or four. ms. aronov: four. mr. cielinski: one. mr. robertson: free tradejonathan: --mr. robertson: three. jonathan: it's been great to have you. aronov, colin robertson, and jim cielinski, that's it for us. "bloomberg real yield," this is bloomberg tv. ♪
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mark: is 12:00 p.m. in new york and midnight in hong kong. 30 minutes left in the trading day in europe, from bloomberg's european headquarters, i'm mark barton. julie: in new york, i'm julie
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hyman in for vonnie quinn. this is the european close on "bloomberg markets." mark: top stories we are covering from the bloomberg and around the world. stocks lower in europe and the u.s. as investors react to a series of geopolitical risks from the looming trade war to a potential u.s. government shutdown. drew houston from as dropbox begins trading on the nasdaq, debuting 38% of public ipo price. and you can prime minister theresa may scores diplomatic -- u.k. prime minister theresa may scores diplomatic victory in brussels as more countries consider ousting russia's diplomats over the allegations in us by poisoning case. europe

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